London Stocks Slip as Oil Prices Drive Inflation Concerns, FTSE 100 Drops
Market Overview and Key Drivers
Sept 10 (Reuters) - London shares hovered around one-month lows on Thursday as oil prices continued to fuel inflation worries in a week packed with economic data, while energy stocks helped keep a lid on losses.
The blue-chip FTSE 100 index fell 0.4% to 10,627.80 points by 0946 GMT, while the midcap FTSE 250 slipped 0.38%.
Oil Prices and Energy Sector Performance
• Brent crude futures were trading over $100 a barrel as the U.S. and Iran's continued attacks on shipping prompted markets to brace for supply disruptions. [O/R]
Energy Stocks Rally
• Energy stocks led gains, rising 0.8%, with Shell and BP extending their rally, up 0.7% and 1%.
Geopolitical Tensions and Market Sentiment
US-Iran Conflict and Investor Reaction
• U.S. President Donald Trump said he expected the conflict to end after the November U.S. midterm elections, but the remark did little to calm investors.
Sector Performance Breakdown
Banks and Financials
• Banks were the biggest drags on the index. HSBC declined over 1.8% after it announced its CFO Pam Kaur would step down in 2027.
Mining Sector
• Both precious and industrial metal miners declined, with Rio Tinto and Anglo American down 0.9% and 1.5%, respectively, even as metal prices gained. [MET/L] [GOL/]
Bond Yields and Economic Data
UK Government Bonds
• British government bond yields rose, with the benchmark 10-year bond hitting a 19-year high and shorter-dated ones at their highest since late 2023.
Upcoming Economic Reports
• Traders await U.S. inflation reports and UK economic growth data this week, which could impact interest rate expectations in these economies.
Interest Rate Expectations
• Markets are pricing in a 60% chance the U.S. Federal Reserve will hike rates next week but widely expect the Bank of England to hold, as per LSEG-compiled data.
Notable Stock Movements
Biggest Fallers
• Associated British Foods bottomed the FTSE 100 with an 11.8% slide after it forecast a decline in fourth-quarter like-for-like sales at budget fashion chain Primark.
• Animal genetics company Genus fell 4.9% after its annual adjusted revenue fell short of analysts' consensus estimates.
• British e-commerce group THG lost 7.1% after warning of a slowdown in its quarterly revenue growth due to new EU import duties.
Reporting Credits
(Reporting by Anand Gopal and Purvi Agarwal in Bengaluru; Editing by Vijay Kishore)
